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February 06, 2013
EPA persists in high cellulosic projections

Less than one week after a U.S. appeals court ruled that EPA’s 2012 applicable volume requirement for cellulosic biofuel was unreasonably high, the Agency proposed a 2013 volume requirement for cellulosic biofuel that almost doubles the requirement vacated by the court.

The EPA states that the approach it used in the proposal is consistent with the court’s ruling, which remanded the 2012 requirement to the Agency for further consideration.  The renewable fuels industry applauded the new proposal, while the petroleum sector asserts that the Agency has simply ignored the court’s instructions.

5.35 million gallon hike

Specifically, the EPA is proposing to set the 2013 cellulosic biofuel applicable volume at 14 million gallons, a 5.35 million gallon increase over the 2012 requirement thrown out by the U.S. Court of Appeals for the D.C. Circuit in its January 25, 2013, opinion.  EPA’s proposal also covers 2013 applicable volumes for biomass-based diesel, advanced biofuel, and total renewable fuels.  The applicable volumes are used to set the minimum annual renewable fuel standard (RFS), which are percentages of total transportation fuels produced;  refiners and importers are required to meet those percentages or carry over the deficit to the following year.

The RFS provisions of the Clean Air Act (CAA) require that the renewable fuel volumes set by the Agency be based on projections made by the Department of Energy’s Energy Information Administration (EIA).  The D.C. Circuit stated that  EPA’s 2012 requirement was more aspirational than fact-oriented. 

Biofuels companies

The EPA now emphasizes that its 2013 cellulosic biofuel proposal is based wholly in CAA requirements and the Agency’s assessment of expected production for the year.  The Agency states:

“Many factors have been taken into consideration in developing these projections, such as the EIA estimate, the current status of project funding, the status of the production facility, anticipated construction timelines, the anticipated start-up date and ramp-up schedule, feedstock supply, intent to generate RINs, and many others.  Moreover, all of the companies included in our 2013 volume projections have invested a significant amount of time and resources developing their technologies at R&D and demonstration-scale facilities prior to the design and construction of their first commercial-scale facilities.  We believe the sum of these individual projected available volumes (14 million ethanol-equivalent gallons) is a reasonable representation of expected production. This projection reflects EPA’s best estimate of what will actually happen in 2013.” 

The Agency’s proposal includes a company-by-company breakout of expected cellulosic biofuels production for 2013.

Associations disagree

The Renewable Fuels Association (RFA) is pleased with EPA’s estimates.  “The advanced ethanol industry appreciates U.S. EPA’s due diligence on getting to the right number on cellulosic biofuels,” says the RFA.  “The cellulosic biofuels industry is just breaking through at commercial scale with the most innovative and cleanest liquid fuel in the world.  U.S. EPA worked hard to ensure that the cellulosic biofuels volume standard for 2013 would be tied directly to the commercial production of cellulosic biofuels expected to come online this year.”

The American Petroleum Institute (API) is unconvinced by corporate promises.  “For four years running, biofuel producers have promised high cellulosic ethanol production,” said API’s Bob Greco.  “EPA uses these aspirational claims to set mandates, but the promised production hasn’t happened.”  The API recommends that the EPA base its requirements on the current year’s cellulosic biofuel production when establishing the mandated volumes for the following year.

Click here for EPA’s proposed 2013 RFSs.

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